levels of brands, Commitment of top management

<< BRAND MANIFESTATIONS/ FUNDAMENTALS:Brand identity, Communication, Differentiation

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Brand Management (MKT624)

Lesson 4

BRAND MANIFESTATIONS/ FUNDAMENTALS

The discussion on brand fundamentals continues from the previous lecture.

Brand Characteristics

Brand characteristics fundamentally relate with the value brands offer their customers and

create for their companies. Value being at the heart of brands' characteristics necessitates that

brands be managed accurately.

The level of accuracy in brand management is reflected by the power brands have. A higher

level of power undoubtedly mirrors a higher level of accurate brand management.

Value and power are not a guarantee that brands will not be attacked. Competition will attack

your brand by trying to dislodge it or snatch market share from it. The battle will never stop.

The question arises, "how to bring in accuracy into brand management in a way that brand's

characteristics get enhanced under competitive challenges and threats"? Competitive pressures

threaten brands' success and even existence.

Given all that, brands become so very essential to the survival and success of business firms

that we need to understand them in all their complexities, so that we can manage them

correctly.

A very strong argument put forward by world renowned consultants, McKinsey is that

companies need to win the right to brand their products. This simply means that branding is just

not about wrapping your product into a nice package and selling that in the hope that you have

turned the product into a brand, which is not going to face any pitfalls and rather is going to be

profitable and powerful, straightaway NO! To have the right characteristics, brands have to

be subjected to a certain criteria, the consultants have concluded.

The consultants claim that in order to win the right to brand, a company has to meet the

following vital criteria.1

· The brand must offer a superior value proposition

· The brand must deliver the superior value

· The brand must maintain a relationship with its customers.

If a brand meets the above criteria in all senses, then it can be defined as the one having the

right characteristics. The criteria to create and maintain brands are so well-meaning that any

company operating outside of them does not have the right to do branding.

This can be further elaborated as follows:

· Brand management is a strategic process and involves complete company effort beyond

the functional boundaries of the marketing department. And, therefore, offering value is

a function and commitment of the whole company.

· The company must have all its resources at work to deliver superior value, which must

be defined in consumer terms. Exactly how the company delivers value varies from

company to company. It could be superior technology, lower cost, strength in

distribution, history of the brand, and creative advertising. Anything defined in

consumer terms will automatically translate into something valuable for the company as

well.

· The brand must have a continuing relationship with the customers, and the brand must

adapt to changes in response to fierce competition yet meaning the same to its loyal

customers.

Brand Management (MKT624)

Brand value at the core of brand characteristics

o Brand characteristics offer us an opportunity to explain what brand value means to

consumers and how a brand creates that value. Bear in mind that brand value is at

the center of brand's characteristics.

o The consumers must feel that they are getting full value for the money spent in

terms of quality. The value has to be more than the generic product. Right branding

adds value to the product. Reconsider the definition of brand management.

o They must feel that the purchase of a certain brand has optimized their decision of

buying the best brand in the category. It is a subjective value, but nonetheless should

be created.

o They must get confirmation of the self-image that they present to others.

o They must get satisfaction out of the attractiveness of the brand.

o They must get satisfaction from the responsible social behavior of the brand in

terms of ecology and other ethical issues.

A brand also creates value for the company.

A strong brand works in the same way for the company as for the consumers. It assures

the following:

o Good future sales

o Good future earnings

o Good future cash flows

o Source of good future demand and lasting attractiveness

o Strong entry barrier to competition

o Carries its value into other markets - local as well as international

o Carries its value into other business categories i.e., new product areas and, hence,

offers economies of scale in advertising, promotions, and other marketing-mix

variables

Layers/levels of brands

Brands are offered in lines, mixes, stretches, and extensions. Behind every form of a brand are

strategic considerations. Such considerations form brand architecture, which is a topic of

detailed discussions in lectures on brand extension and brand architecture (lectures 21 28).

It owes to strategic considerations that brand managers decide whether a brand should form a

product line as a stand-alone brand, a company-name brand, designer-name brand, or an

extension/stretch of an existing brand name.

The decision to name a brand into any one of the above-mentioned classifications has one

fundamental common to all the relationship between a product and a brand. An understanding

into developing that product-brand relationship leads you to build up the right branding

strategies. This implies you will then be able to define different layers of brands (lectures 21

28).

Commitment of top management (Brand owners' commitment)

We are clear how brands create value for the consumer and the company. We must also look

into how a brand generates its own value to be able to create value for its two beneficiaries,

namely the consumer and the company.

Actually, a brand does not generate its own value; it is the commitment and quality of brand

management that builds up value of a brand over the years.

Companies that believe in continuously maintaining value of their brands and adding further

value to them are the ones that view brand management as strategic objective and never lose

sight of that goal.

Brand Management (MKT624)

The concept can be explained graphically with

The Value Interface

the help of a value interface. If you come to

think of it there are brands on the international

market as well as our local one that have been

around since the early last century the

Brand Creates

examples are from the beverage, tea, smoking,

Value for

and other industries. You can create a list of

Company

Consumer

your own.

Such brands have their longevity owing not to

accidents. They owe that to commitment of their

managements that have been investing into

Management

manufacturing and marketing areas:

Commitment

· In manufacturing for the purpose of

Creates

innovations and adapting to changing

Figure 8

Brand Value

consumer tastes, maintenance and

improvement of quality and

· In marketing from the distribution and advertising viewpoints. The whole exercise is

expensive!

That above explains:

· Why companies invest into brands and manage them prudently over years and years?

· Why acquiring companies are willing to pay a high price for established brands that are

leaders in their own right?

· Why is it tempting to buy brands than to build them from scratch?

The answers to all the questions converge on one point create value for the consumer and the

company, which is possible only if management is totally committed.

Summary Lectures 3 and 4

Understanding brand fundamentals is important to develop an understanding into the strategic

process of brand asset management. Fundamentals manifest themselves in four different forms

dimensions, characteristics, layers, and commitment of management.

The concept of brand identity and image are central to the dimensions of brands and lays the

very foundation of what we want to create and how we want that creation imagined at the

consumer's end.

We can also say that if brands have consistent dimensions and strong characteristics, then they

offer superior consumer value. Value to consumers get translated into value to company.

What really constitutes superior consumer value is a deep understanding of the consumer.

Managers must put themselves into the shoes of consumers /customers and think how the latter

think and react to different brands and branding decisions.

The whole company has to work as a monolithic whole when it comes to supporting the right

branding decisions. The company must remain committed to good quality. Quality here means

the quality as perceived by consumers.

The company must also provide differentiation. The whole point is to create customers. And,

nothing would work more effectively than having a point of difference as compared with

competition.

The company must support the brands through investment into production processes, research

and development, continuous innovation, advertising, and human resource development. No

brand can survive for long without the active support and total commitment of the

management.

Brand Management (MKT624)

Bibliography

1. Geoffrey Randall: "Branding A Practical Guide to Planning your Strategy"; Kogan Page

(2)

Suggested readings

1. Geoffrey Randall: "Branding A Practical Guide to Planning your Strategy"; Kogan Page

(chapters 1 and 2)

2. Jean-Noel Kapferer: "Strategic Brand Management"; Kogan Page (chapter 1)

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